Why Did Horizon Technology Finance Corp. (HRZN) Plunge 13.98%?

Horizon Technology Finance Corp. (HRZN) experienced a significant drop of 13.98% in pre-market trading on April 30, 2025, reflecting investor concerns and market reactions to recent financial disclosures and operational updates.

Horizon Technology Finance reported a net loss of $21.4 million for the first quarter of 2025, primarily due to a decrease in net investment income and unrealized depreciation on investments. The company's net investment income per share was $0.27, missing analyst estimates of $0.33. This financial performance was influenced by lower interest income on investments and increased interest expenses.

The company's debt portfolio yield remained robust at 15.0%, but the overall financial health was impacted by a net unrealized depreciation of $32.2 million on investments. Despite these challenges, Horizon Technology Finance continued to fund new loans, raising approximately $3.6 million through its ATM offering program and funding nine loans totaling $100.3 million.

Horizon Technology Finance also faced liquidity events from five portfolio companies, which included loan prepayments and the sale of warrants or equity. These events, while providing some liquidity, also indicated potential risks within the portfolio. The company's net asset value per share decreased to $7.57, reflecting the overall financial strain.

Looking ahead, Horizon Technology Finance aims to selectively originate new, high-quality venture debt investments and increase its net asset value. The company's board of directors declared monthly distributions of $0.11 per share for July, August, and September 2025, totaling $0.33 per share. This move is intended to provide some stability to shareholders amidst the current market volatility.